EUR/USD CONSOLIDATING AFTER RALLY

EUR/USD keeps consolidating near the level of 1.1750 as positive data from the Eurozone cheered the bulls. The core consumer price index in July, according to the preliminary report, increased by 0.1% to 1.2% and the unemployment rate in the monetary union declined by 0.1% in June to 9.1%. Despite the strong data traders are in no hurry to build-up long positions on the euro ahead of the US employment data due at the end of the week. Positive statistics for the non-farm payrolls and the unemployment rate in the America may trigger massive profit taking that, in turn, may lead to a sharp fall for the common currency against the US dollar. On the other hand, weak growth of inflation in the US and political tensions in the country connected to Donald Trump and his administration may see the reverse situation.

The USD/JPY continued to fall on the background of strong interest in the yen as a safe haven asset and positive data from Japan according to which the industrial production volume for June increased by 1.6% and the number of housing starts increased by 1.7% against an expected increase of only 0.1%. Tomorrow traders will monitor the report on flash manufacturing PMI at 00:30 GMT.

The price of light sweet crude oil benchmark WTI has reached the psychologically important level of 50.00 dollars per barrel as confidence grows in the production cut deal being maintained and the intention of Saudi Arabia to reduce its export volume in August. Also, we are seeing a slower rise in drilling activity in the US and that is also positive for the bulls.

EUR/USD

The EUR/USD consolidated above 1.1700 level after a strong rally during the last few weeks. The closest target within the current upward trend is at 1.1800, the overcoming of which may become a strong stimulus for continued upward movement to 1.2000. The confirmation of the trend change to negative will come from overcoming support at 1.1620 and in this case the quotes may fall to 1.1500 and 1.1380.

USD/JPY

The USD/JPY price was able to break through strong support at 110.75 and is still moving along the descending line. In order to keep moving downwards, quotes need to break another support at 110.30 and in this case we may see the price drop to 109.60 and 109.00. On the opposite side, gaining a foothold above 110.70 may become a trigger for continued increases to 113.00 and 114.00.

WTI

The WTI price is correcting downwards after it approached the important level of 50.00. Its overcoming may become a strong stimulus for the increase to 52.00 and above. The immediate support is located at 49.00 and its breaking may lead to further drops to 47.75 and 46.75. After confident growth during the previous weeks, we do not exclude the price to retreat on the background of profit taking.